Thursday, January 31, 2013

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In yesterday’s posting, we decided (that is, I decided, and
you presumably went along with it if you’re still reading this blog) that we
can’t afford to go around basing our economics on anything other than reason —
which is what we do in binary economics.The other schools of economics in some degree get away from reason,
usually either to justify or get around what Louis Kelso and Mortimer Adler called
the slavery of past savings without ever really dealing with it.

That is why we believe that Capital Homesteading is the only
rational solution to today’s economic and
political problems, at least that we're aware of.That, of course,
is just another way of saying that it’s the only solution — for if a proposal
is not rational, why would you implement it?

Capital
Homesteading is an application of the principles of the Just Third Way, i.e.,
the three principles of economic justice and the four pillars of an
economically just society. These are all based on the natural law, as
explained by Kelso and Adler in Chapter 5 of The Capitalist Manifesto
(1958). Justice in civil society necessarily implies relationships
based on contract, not status. That being the case, all economic
transactions are necessarily based on contracts between persons of
presumably equal status.

Difficulties arise when the persons are not truly of equal status, e.g.,
between owner and non-owner, but the presumption of equality is there until
proven otherwise. You would otherwise be assuming (contrary to
fundamental precepts of the natural law) that all human beings do not
have an analogously complete (“equal”) capacity to acquire and develop virtue,
and thus do not have equal rights. The Just Third Way takes this
into account when it would limit the role of the State to (among other things)
enforcing contracts in those instances in which one of the parties attempts to
use the presumption of equal status when status is actually unequal to his or
her advantage and the detriment of the other party to the contract.

Liberty — freedom of association/contract — is so fundamental to social life
that Pius XI mentions it seven times in a single paragraph in Quadragesimo
Anno (§ 87), and countless times by implication throughout the encyclical.
To disparage liberty/freedom of association/contract in social life in the hope
of changing human nature and — contrary to explicit papal teachings — force
social relationships to being based on need/charity/status, except in domestic
society or in extreme cases in an emergency, undermines the natural law by
trying to shift it from God’s Nature, self-realized in His Intellect (and
therefore discernible by the force of natural reason alone), to your private
interpretation of something you accept as God’s Will — a straight road to
totalitarianism, as we’ve said already, and the chief danger to Catholic
doctrine today. (Pius XII, Humani Generis, §§ 1-2)

In those instances where you have transactions between persons of unequal
status, relationships come under charity instead of justice (except in extreme
cases, when the State can step in and make an emergency redistribution), as Leo
XIII explains in § 22 of Rerum Novarum.

Thus, in ordinary circumstances in civil society, “distributions”
(“relationships” would be more accurate) are based on contract, except in
extreme cases where a redistribution of existing wealth may be necessary in an
emergency, in which particular case, and justified by the principle of double
effect, specific relationships may temporarily take on characteristics of
domestic society and be based on need, which implies a condition or status of
dependency.

In short, respect for essential human dignity demands that people in civil
society be treated as fully human and equal in status until and unless it can
be proven otherwise, and relationships based on contract.